There's a lot to like about the Android based HTC as its one of the most flexible and customizable PC-like smart phones on the market. However, with 3G service in only 22 markets at launch time, this leaves much of the country and most of T-Mobile's customers with an uprade predicament.
According to T-Mobile's website after a customer selects a voice plan they must select a data plan having a minimum $25/mo. That may be justifiable for those in the 22 markets but paying a $550 data premium in a two year contract to rely on a barely useful 2G service isn't very exciting, especially compared to iPhone and AT&T's larger 3G footprint. T-Mobile understands their go-to-market offering isn't attractive outside their 3G markets so they plan to limit retail G1 sales to stores only in the 3G markets.
But wait a minute, why walk away from the majority of your existing customers? If I were a T-Mobile customer I might still desire to upgrade for the features of a G1 handset and use its Wi-Fi capability but paying a $550 data fee for a 3G service I can't use is a show stopper.
Sure, the handset cost is probably subsidized and T-Mobile needs extra fees to recover their cost. That's fine. Then introduce a plan designed to encourage upgrades among the people who are most profitable to upgrade and those are your current customers.
How about something like this.
1. Offer the G1 without the $550 data premium and charge a higher price for the phone.
2. Instead of an unlimited 2G-3G data plan offer a pre-paid data capability enabling the consumer to benefit from all the other G1 handset features, its integrated Wi-Fi and some occassional 2G service.
My point is this. For all the people in your 2G footprint, and that's probably still the majority of them, give them a reason to want to stay with T-Mobile and upgrade to G1 today rather than push them to the 3G capabilities of AT&T or Verizon.
Anyway, that's just a thought.
Here's my idea fire the new brain dead ceo
for t-mobile USA that has new towers going up w/o 3g installed. he must have come from
the evil empire as he hates customer choice and doesn;t get that telcom standards drive the mkt so customers like using thier own equipment phones routers etc.
They're losing customers to ATT because of their 3g biz model as you have out lined doesn't work. they have 7 lousy 3g phones.
This is exactly right! I just spent time with Robert, rep # 04412712 and expressed how I felt trapped with a phone I no longer wanted but simply will not pay $349 for this new G phone when Joe Blow off the street can get the same phone for $179. Telling me to call back from time to time to check on deals - well I don't have time for that and even if I did I still would not do that.
I am forced to stay with T-Mobile until my contract expires and then I will change services.... unless they update their terms and conditions that will give me the out I need!
Joe Blow from off the street is getting a SUBSIDIZED price off of the manufacturing costs. He's getting a price that is LESS than what the phone costs to make...the contract makes up the difference and hence, gives DT profits. I don't understand how people can't seem to understand that. The G1 is more powerful and capable than some of the laptops developed only a few years ago. It's more powerful than ALL the computers NASA had to put people on the moon combined. I think the US consumer is so spoiled from phone subsidies, companies should just stop doing it, and make people pay for the full price of the phone and do away with contracts. They aren't smart enough to understand how profit margins work. Another thing companies should do away with is vacation suspension. So many stupid people whining that they had to pay $15 bucks when they were on vacation when their normal bill is 120 for the whole family. I wonder if their cable, highspeed internet, utility and local phone companies offered such a nice service for customers going away.
Listen, T-Mobile reminds me of TWA, first it's service, then it's customer frustration, then the service gets worse and every expereince you have with the company gets worse...
I no longer own ANYTHING T-Mobile, including my phones...
Watch this one die over the next 18-36 months, it's a pattern we've seen many times with many companies...
There's a key element I omitted in the original post that needs also to be addressed.
Looking at the upgrade decision from a current T-Mobile customer perspective I see that if I want to purchase a new G1 I'd have to commit to a new two year T-Mobile contract. For current customers in good standing I view this requirement as counterproductive because it does nothing to encourage current customers to remain with T-Mobile since the contract I'd get by buying an iPhone or Blackberry Storm is exactly the same, plus they'll probably shower me with freebies. T-Mobile in effect throws away the advantage they have for me to spend more money with them even if I want to.
I doubt this is intentional. Most likely this stems from the hardware subsidy and it distorts the economics of the deal so that T-Mobile has to get 24 months of a voice plan and data plan revenue to come out ahead - no matter who the consumer belongs to. This is unfortunate as the T-Mobile customer that goes to another carrier to get the latest generation of smart phone technology also brings their voice business with them.
DT/T-Mobile if you're listening it might be a good idea to fix this.
Better yet if you allow them to buy a G1 for some higher price (maybe $295 or so), create a pre-paid data plan on top of the voice service and drop the two year contract requirement to possibly one year. Show your current customers you really appreciate their business and you might be surprised how fast you can grow the G1 business.
Oh yes T-Mobile, while you're addressing all the above issues, don't forget to scrap the $18 "upgrade" fee you want to charge customers for the privilege of spending more money with you.
AT&T and Verizon will welcome your premium smart phone customers to their networks without such a fee.